succession planning: the key to long-term...

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www.openminds.com163 York Street, Gettysburg, Pennsylvania 17325Phone: 717-334-1329 - Email: [email protected]

The 2015 OPEN MINDS Executive Leadership RetreatSeptember 24, 2015 | 9:45 AM - 12:00 PM

Stuart I. Meyers, M.B.A., Ed.D., President, The Meyers Group

Succession Planning: The Key To Long-Term Leadership Success


I. Critical Elements In Succession Planning

II. Succession Planning Case Studies The Adaptive Model – Spectrum Healthcare

• April Razo, LAMFT, Chief Executive Officer

• Robert D. Cartia, M.B.A., M.A., LISAC, Mentor/Coach/Retiring CEO

The Maturity Model – Harbor Behavioral Health • John M. Sheehan, M.B.A., Chief Executive Officer

III. Questions & Discussion

Agenda


Learning Objectives

Discuss why it is so important to have a plan in place

Discuss the critical elements that go into a good succession plan

Discuss the role of the Board and CEO in developing and implementing a plan

Describe how to prepare an organization and community for a smooth transition

Outline the critical elements needed in a strong plan

Discuss the importance of planning for “unexpected” changes at the top

Discuss the importance of ‘transparency” and effective communications

Outline the steps needed for a Board to conduct a successful CEO recruitment strategy


“Before everything else, getting ready is the secret to success.”

- Henry Ford


“I start with the premise that the function of leadership is to produce more leaders, not more followers.”

- Ralph Nader


“From now on, choosing my successor is the most important decision I’ll make. It occupies a considerable amount of thought almost every day.”

- Jack Welch(Former CEO, General Electric; quoted 9 years before his retirement)


“The boss’s failure to groom an internal successor may point to a more difficult aspect of the problem. Some CEOs have a hard time acknowledging their dispensability (and their mortality) or are reluctant to have anyone near them who could eventually take their place. The board may have colluded in sustaining the perception of utter dependence on his presence. All of this does the organization a disservice and makes the CEO’s retirement bittersweet rather than a cause for celebration.”

- Dr. Kerry J. SulkowiczSource: Sulkowicz, Dr. Kerry J. (2005, May). The Corporate Shrink Fast Company, 96


“A succession planning and management program is the organization’s deliberate and systematic effort to ensure leadership continuity in key positions, retain and develop intellectual and knowledge capital for the future, and to encourage individual advancement”

- OPEN MINDS, May 2005

Definition Of Succession Planning (Homegrown)


“Succession Planning is a process whereby an organization ensures that employees are recruited and developed to fill each key role within the company. Through your succession planning process you recruit superior employees, develop their knowledge, skills, and abilities, and prepare them for advancement or promotion into ever more challenging roles.

Through your succession planning process, you also retain superior employees because they appreciate the time, attention, and development that you are investing in them…to do it effectively you must identify the organization’s long term goals…

You need to identify and understand the developmental needs of your employees. You must ensure that all key employees understand their career paths and the roles they are being developed to fill. You need to focus resources on key employee retention…and need to be aware of employee trends in your area to know the roles you will have difficulty filling externally.”

- Unknown Source

Another Definition Of Succession Planning


Why Is It Essential That A Written Plan Be In Place? (Internal, External, Planned, Sudden)

It reassures the organization/stakeholders

Minimizes surprises; stressful developments

Makes changes feel “seamless”

Board, staff understand the process, procedures, and roles

Encourages career progression

Fosters corporate culture of valuing human assets

Ongoing auditing of talent pool needed based on strategic plan


The Board’s Responsibility

CEO hiring/firing/evaluation

Strategic plan approval

Budget approval

Fiduciary responsibility to community

Major policies/procedures


Internal Or External Succession Plan?

Internal rationale– Provides for stability

– Reduces learning curves

– Cost effective

– Recruitment and retention aid

– Community perception of smooth transition

– Encourages internal competition and growth

External rationale– No talent identified

– Marketplace requires new skills

– Fresh ideas and new perspectives

– Can “compare and contrast”


Timing Is Everything

When is it best to announce?

Ideal time for a transition

How long between announcement and actual succession?

How long an overlap between departing and new leader?


What Should Take Place During This Period From Announcement To Actual Departure?

Work goes on as usual…no “lame duck” here

Work “the plan” ...it was good then, and it is good now

Accountability doesn’t change

Communicate clearly and frequently

Attend to internal and external stakeholders

Understand there is a “grieving” process, with stages

Understand that the focus will begin to change to “what about me?”(talk about it)

The Board is more essential than ever


Where To Begin

Organization commitment; Board and CEO

Evaluate staffing needs – now and in the future

Commitment to performance appraisal systems and evaluations

Match staff strengths and potential to needs

Institutionalize development plan for each participant

Annual review of systems and processes…adjustments


Where To Begin (Continued)

Career development understood as a two-way street

Development of a specific outline of skill sets, experiences, and knowledge required for each leadership position

Identification of employees who have the potential to move into such positions

Shared organization/employee commitment to have this person participate in the succession planning process – without a guarantee of promotion

Designation of a senior manager to manage the organizational processes and ensure annual reviews/revisions/evaluations take place (HR?)

Remember: no guarantees, but important to seize the opportunity to grow and maximize one’s potential


Defining The Actual Process Of Picking A Successor

Who’s involved?

Step-by-step outline of an “ideal” search process and role of the Board

How are interviews planned and scheduled?

How many candidates should be considered?

What critical discussions with candidates need to take place?

Timetables for a process?

Role of candidate’s spouse/significant other?


How To Define The Profile Of An “Ideal” Successor

Review organization’s strategic plan (know your local and national trends)

Input from key internal/external stakeholders

Put it in writing


What About The Transition Period?

Best use of a transition period while current CEO remains in place

The actual passing of the gavel – the importance of symbolism

A celebration of the past and opportunities for the organization

Is overlap a good thing? For how long? How managed?

Honoring one’s predecessor


The Importance Of Communication Throughout The Entire Process

From the Board

From the CEO

From management

Change = anxiety for staff, clients, and community

Information circulated often and consistently will reduce anxiety

Important that communication comes from the Board


Succession Planning – When Unexpected (“Stuff” Happens)

What should be in place “just in case?”

Critical role of the Board

Selection of an interim leader– Process

– Qualifications

– Expectations

– Authority

– Role of the Board

Defining a process to select a permanent successor


What Should Take Place During The Selection Stage – Internal Or External Needs analysis – developing the profile

Critical role of stakeholders – internal and external

“Culture assessment”

Search strategy

Research, sourcing, marketing

Qualifying candidates (and spouses, significant others)

Presentations: oral, written; behavioral interviews

Testing (e.g. emotional intelligence, DiSC)

References; validating track record

Win-Win approach to offer

Integration into organization and community


Minimizing Disruption; Assuring As Seamless A Transition As Possible

Business needs to go on

Dealing with the “walk on water” fantasy

Control issues can be disruptive

“Grieving” process is normal, and variable

No one likes surprises…so begin with the end in mind


One More Time…

The critical importance of communications throughout the process


When It Goes Wrong, It Goes Very, Very Wrong! A Few Examples & “If Only We Had…”

When it wasn’t in writing at a time of crisis

When there wasn’t a designated interim who was equipped to step up

When there was no consensus about future direction

When internal struggles for influence prevail

When Board and CEO aren’t on the same page

When external forces can impact a Board


Dr. Stuart Meyers

President – The Meyers Group

Executive Search Consultants

11700 Old Georgetown Rd. #705, N. Bethesda MD, 20852

301-625-5600 | http://www.mr-themeyersgroup.com/

The Adaptive Model: Spectrum Healthcare

April Razo, LAMFT, Chief Executive Officer Robert D. Cartia, M.B.A., M.A., LISAC, Mentor/Coach/Retiring CEO


Spectrum BOD annually requested succession plan update

Over the past ten years, CEO mentored two senior Executive Team members as possible successors

June 2014 Spectrum Healthcare CEO negotiated final year employment contract (9/14 -8/15)

Despite mentoring efforts Spectrum CEO and BOD not confident in the viability of any internal candidate

The Board wanted to evaluate seasoned applicants


The Board asked CEO to engage Stuart Meyers for a national candidate search

Dr. Meyers conducted an initial on-site assessment

Dr. Meyers asked CEO if "there was anyone internally we are missing“

That query prompted a wider view of "possibilities" including a re-review of aforementioned mentored managers

Examined individuals outside of the normal line of ascension


Two people identified as long shots with April (Children's Program Director) one of the two– April was not well known to CEO, but stood out

– Her skills, talents, and interest were explored

– Note: At that time, had six members of an eight member E.T. that rose from the ranks

April was introduced to Dr. Meyers

Dr. Meyers and CEO discussed new option with the Board


Opportunity of a lifetime – I was minding my own business and doing my job – “Hey! You want to be the CEO?”

Early bird gets the worm – Stuart and Robert discussed the proposed timeline with the BOD – I would get to apply and be considered ahead of external applicants

The path to the finish– Stuart and Robert laid out the process and timeline


The Evaluation Process– Took place over 4 months

– Interview with Stuart

– Emotional IQ analysis and DiSC profile

THE BIG DAY– All day interviews with the Executive Team and the BOD

– A presentation to the BOD and E.T. discussing my perception of the challenges ahead for our agency and how I propose to tackle them

– The BOD voted at the end of the day — SUCCESS!

The Development Plan– Robert crafted a robust development plan to cover the transition time period – the purpose of the plan

was to ensure that I had exposure to the various aspects of the CEO position while Robert was still the CEO

– Progress on the plan was reported monthly at Board meetings

– The plan was structured, yet allowed for flexibility on topics that did not need as much attention

The Maturity Model: Harbor Behavioral Health

John M. Sheehan, M.B.A., Chief Executive Officer

Succession: Planning for the Future

Presented By: John Sheehan, President/CEO

Bersin & Associates and Center for Creative Leadership © April 2009

Why?♦ Great organizations “grow their own” future

leadership to reflect the culture and critical qualities they have defined for success.

♦ Succession planning prepares future leaders for their next position by focusing on improved attributes, competencies and goals – beneficial to overall performance.

♦ The criteria for internal talent development can be applied to outside recruitment.

♦ The “wisdom of the org” is preserved across professional generations.

♦ Boards have competent metrics and process for choosing new leadership

Essential Elements

♦ Responsible Stewardship

♦ In-depth analysis of future needs vs current

♦ Executive commitment and engagement

♦ Culture of mentoring, advancement and growth

♦ Transparent measurement

This is a confidential ProMedica document. You are prohibited from duplicating or otherwise disseminating any of the information contained herein.

DidDo(performance)

CanDo(potential)

WillDo(readiness)

Organizational Development: People Development Model Deeper Insights

AnnualEmployee

Performance Management

& Executive

Performance ManagementProcess(es)

ProMedica’s Internal

Assessment Center

(MBTI, FIRO-B, CPI-260, Emotional

Intelligence 2.0 etc.)

Development-Oriented

360-Assessments &

Leadership Development

(Denison, Leadership Challenge Academy)

Feedback & Skill-Building

Tests, Inventories

(for example: May include:

Hogan Inventories, etc.

Mid-Level to Executive:

Leader Ready (L3)

DDI Leader Readiness

Assessment

Executive to Sr. Executive/Chief

Officers:

Acceleration Assessment

CenterDDI Leader Simulation

Assessment

Highlighted box indicate collaboration with DDI.

ProMedica’sODAssessmentCenter


ProMedica Leadership Pipeline

Leading Self

Leading Self

Leading OthersLeading Others

Leading LeadersLeading Leaders

Leading a Function

Leading a Function

Leading the

Organization

Leading the

Organization

WHO

IndividualContributors:

ProfessionalStaff&EmergingLeaders

LeadersofIndividualContributors

ExperiencedLeaderswho LeadotherManagersorSr.ProfessionalStaff

SeniorLeadersofOrganizationalFunctions

orDivisions

TopExecutivesoftheOrganizationLeadingthe

IntegratedSystem

DEVELO

PMENTPRO

GRAM

Introducesfundamentalsofeffectiveleadershipfor

greatersuccessatProMedica

Preparesfront‐linemanagerstoachievelastingresultsthrough

people

Experiencedleaders wholeadotherleadersormatrixed functions

SeniorLeaders&PhysicianExecutiveswho leadProMedicaBusinessor

ServiceUnits(generallyVP‐ andabove)

Senior Executives&Presidents(includingChiefOfficers)

PMU: PP‐100Series PMU:PL– 200Series PMU:PL– 300SeriesLeadershipDevelopmentPrograms

DenisonHigh‐PerformingLeadership360‐ DevelopmentProgram(ContextualIntelligence)

DenisonHigh‐PerformingLeadership360‐ DevelopmentProgram(ContextualIntelligence)

ErrorPrevention ProMedica’sBlanchardCertified

LeadershipChallengeAcademy– 360Inventory(Contextual Intelligence)

PeerLevelExecutiveCoaching ExecutiveCoaching

CrucialConversations Crucial Confrontations CrucialAccountability PMU: PL– 300&IMS IMS

HealthStream AssignedContent

Leadership Methods/ErrorPrevention

LeadershipMethods /ErrorPrevention

EmotionalIntelligence(2.0 –UT)

Formal ExecutiveEducation(eMBAProgram)andorCertificatePrograms

ProMedica’sAssessment Centerisavailabletoalllevelsofleaderstounderstandleadershiptraits,skillsandattributes(mappedbacktoFYICompetencies)

CrucialAccountability Industry‐specificcontinuingeducation


ProMedica Leadership Development Framework

EXPERIENCES LEARNING FROM OTHERS

FORMAL LEARNINGPROGRAMS

On‐the‐Job Experiences (within one’s area – or outside one’s

area)

ProMedica University (PMU) ACHE & ACPE Endorsed Programs

Special Projects (related to

critical business imperatives)

Annual President/CEO Colloquium on Leadership Studies

(emerging and seasoned leaders)

ProMedica Sponsored eMBA Programs (UT, BGSU) and top‐

tier programs for Sr. Execs.

Community Experiences(related to community advocacy)

Blanchard Leadership Institute for Management Studies (IMS)

Internships, Post‐Graduate Healthcare Administration Fellowship & Summer Youth Employment

Programs

Leadership Challenge Academy (transformational leadership model,

contextual intelligence)

Emotional Intelligence (2.0) –partnership with UT

Crucial Skills (Vital Smarts)Learning Management System (HealthStream – online learning)

Other Healthcare Industry‐Specific Conference Education

Key Findings♦ Great organizations in the health care sector have

evolved talent acquisition, development and management strategies to a science with benchmarks.

♦ Effective leadership development is a unique, multi-faceted process, that may include personal/professional attribute assessment, training, experiential learning, ongoing evaluation, mentoring and ranking.

♦ Effective leadership requires more than talent and correlates directly to organizational success.

♦ External recruitment is a popular but limited approach.

Questions & Discussion

www.openminds.com163 York Street, Gettysburg, Pennsylvania 17325Phone: 717-334-1329 - Email: [email protected]

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succession planning: the key to long-term...

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